The IRS has determined that businesses will not need to reconcile their gross receipts with their merchant credit card transactions reported to them on Form 1099-K. This new ruling is now in effect for the year 2012 and later tax returns.
The IRS deputy commissioner for services and enforcement, Steven T. Miller, said in a written memo to the National Federation of Independent Business that no reconciliation will be required on 2012 or future business tax returns. The IRS previously said in October of last year that no return entry would be required for 2011 tax returns, although they left a line on the returns saying “For 2011, enter 0.”
We previously advised our business clients to separately track their cash receipts from merchant card payments beginning in 2012. Please be advised that you are now no longer required to do this reconciliation.
If you have any questions regarding this alert please feel free to contact us.